The Federal Reserve Bank of Dallas indicated that its industrial activity in
the state was little-changed during July, ending sharp declines since early last
year. Its General Business Activity index rose to -1.3 this month from -18.3 in
June, but it was at the highest level since December 2014. The level of unfilled
orders surged to the highest level since November. The production series
improved following two months of negative readings, and the growth rate of new
orders rose to the highest level in two months. Employment also improved to its
best reading in six months and the average workweek lengthened. Growth in wages
& benefits, however, deteriorated sharply. Current pricing power improved
versus Q4'15, but it remained restrained.

The outlook brightened significantly. The general business activity and
company outlook readings, six months ahead, both surged to the highest levels in
12 months. Expected new orders and production both surged. Expected shipments
and unfilled orders also gained. Hiring was expected to improve significantly
along with the length of the factory workweek. Wages & benefits, however,
were expected to weaken, reversing improvement since January.

Each index is calculated by subtracting the percentage reporting a decrease
from the percentage reporting an increase. When all firms report that activity
has increased, an index will register 100. An index will register -100 when all
firms report a decrease. An index will be zero when the number of firms
reporting an increase or decrease is equal. Items may not add up to 100% because
of rounding. Data for the Texas Manufacturing Outlook can be found in Haver's SURVEYS database.